Plz use financial calculator if possible

CASE:

Aerocomp is in the busines of computing and computers. They have made decent money in the recent past. John Christer, CEO of Aerocomp has informed the Board of Director of Aerocomp that the company has extra cash of about $2.5 million. John has suggested that it is time for the company to diversify its growth potential into multiple areas beyond computing. Mark Zuber, the executive assistant to the CEO of Aerocomp, has proposed three alternative investments which are described as under:

Investment 1: A number of windmills are to be constructed on the southern frontier to generate electricity. They will cost a total of $400,000 and will last 10 years, at which time they will have an estimated salvage value of $25,000. However, a capital upgrade of $100,000 will be required at the end of five years. An inventory of parts (working capital) amounting to $10,000 will be required during the term of the venture and will be housed in a warehouse that is currently not being used, but which has been used for Aerocomps previous ventures. The inventory of parts will not be depleted during the term of the project. The warehouse could be rented out at $5,000 per year.

This enterprise is expected to generate revenues of $150,000 a year for 10 years. The federal experts on wind will impose their new tax on the wind, and that will cost the venture $7,500 a year. This new tax will be a deduction for income tax purposes and will be known as the BWT (Big Wind Tax).

Tax rate = 25%

CCA rate = 5%

Cost of capital = 20%

REQUIREED:

Norman Windsor, CMA, CPA, has recently joined Aerocomp as Senior Financial Analyst. It is Friday morning. John met Norman while he was buying the morning coffee before he starts his work for the day. John tells him about the company plan and shares with him three proposals that the Board is considering. The Board members do not have any experience in financial analysis. Before the Board decides on the projects, John asks Norman to prepare the financial viability of three alternative investments. John asks Norman to do the following:

1. Identify cash inflows and cash outflows for each project, and how these cash flows will be treated in the calculations of financial indicators.
2. Calculate for each project the four indicators of financial viability, e.g.,
   1. Net Present Value
   2. IRR
   3. Payback period
   4. Profitability Index

and document them in a table.

3. John emphasizes the role of sensitivity in evaluating these proposals. John asks Norman to increase/ decrease the key cash inflows (mainly the revenues or cost savings) by 10%, and analyze the impact on four indicators of financial viability (NPV, IRR, Payback Period, and Profitability Index). Document the results in a table.
4. make recommendations using a brief report to the CEO. You must include in your analysis any qualitative factors that might play an important role in making the final decision.